Manpower Supply Services from Foreign Entities Attract Service Tax Under Reverse Charge for Cost Reimbursement Agreements

Service tax liability was confirmed on manpower supply services received from overseas entities during 2008-2013, following precedent set in Northern Operating Systems case. Tribunal held that overseas personnel deployment constituted taxable manpower supply services under reverse charge mechanism based on analysis of cost reimbursement agreements. However, extended period of limitation was not invokable for demand computation. Since appellant had already paid service tax with interest on ITSS and training services before show cause notice, penalties were set aside. Matter remanded to adjudicating authority to recalculate liability within normal limitation period. Appeal allowed partially through remand for revised assessment. .....

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